The Great Atlantic & Pacific Tea Company (NYSE:GAP)-- whose A&P grocery store chain was once so iconic that John Updike named a short story after it --reported third-quarter results on Friday morning that weren't worth writing home about. The company lost $1.74 a share during the quarter for a total of $71 million. Though numerous special items make it difficult to read the tea leaves clearly here, those figures seem to represent a slight improvement over 2004's third quarter, when A&P reported a loss of $75 million, or $1.96 per stub.

Investors, for their part, weren't much impressed. Indeed, on the day of the announcement, A&P's stock fell by more than 9% -- a trajectory that might cause investing cheapskates to wonder if perhaps A&P is a bargain just now.

I'd say no. The stock soared in 2005, after all, more than tripling on the year despite the supermarket chain's lack of positive free cash flow since 2002. Indeed, for the trailing 12 months that ended with the company's second quarter back in September, A&P was in the free cash flow hole by more than $227 million. In addition, A&P's same-store sales have been flat for 40 weeks into fiscal 2005. These weak financial fundamentals have earned the company a minuscule 2.7 P/E.

Then, of course, there's the intensely competitive nature of the grocery biz. With bigger boys such as Kroger (NYSE:KR), Safeway (NYSE:SWY), Albertsons (NYSE:ABS), and Wal-Mart (NYSE:WMT) better able to compete on price -- and with Whole Foods Market (NASDAQ:WFMI) siphoning off the higher-margin crowd -- A&P's stock could well get squeezed further.

As with its regional supermarket rival, Pathmark (NASDAQ:PTMK), A&P investors should mull whether this little fish has further to swim -- or further to sink. Personally, I'm leaning toward the latter.

Further Foolish food for thought:

Whole Foods is a Motley Fool Stock Advisor recommendation.

Shannon Zimmerman heads up the Motley Fool Champion Funds newsletter service and owns none of the stocks mentioned. The Fool is investors writing for investors.